Despite a slowing rate of recovery, London’s West End is forecast to return to its historic annual turnover of over £10 billion by 2025, according to an updated report from global property consultancy, Colliers.
London's West End On Track To Achieve £10 Billion Turnover by 2025
- New figures show that sales are up 109% compared to 2021, as spend continues to outperform footfall.
- New Elizabeth Line set to boost annual West End performance by around 7% in the next 9 years, adding between £700m and £800m in sales.
- West End businesses continue to call for more government support in the form of relaxed Sunday Trading Hours and a simplified visa process.
October 2022, London - London’s West End looks set to reach its historical annual turnover of £10 billion by 2025, according to new research released today. Despite slowed recovery due to economic uncertainty, year-to-date sales are up 109% compared to 2021 and spend continues to outperform footfall.
New West End Company (NWEC) – which represents 600 retail, restaurant, hotel and property owners across Bond St, Oxford St, Regent St & Mayfair – initially commissioned a report from Colliers in February of this year to explore how the West End was recovering post-pandemic. The latest data confirms that the district is still on track to hit turnover targets, a prediction that came before extra support was announced as part of the Chancellor’s September mini-budget.
A significant part of this growth is being driven by the opening of the Elizabeth Line, which is expected to be the main mode of transport for 13% of visitors into the district by 2023. It is predicted that increased visitor numbers from the new lines will lead to around a 7% boost in the West End’s annual performance by 2031, influencing between £700m and £800m a year (or between £5 billion and £7 billion cumulatively by 2031) in additional sales.
However, recovery is not without its challenges. Since the last report, retail footfall has been hampered by a challenging consumer climate due to the cost of living crisis, international visitation remaining below pre-pandemic levels and a continued shift to online shopping. All of these have led to a difficult environment in which businesses are struggling to prosper.
Dee Corsi, Interim Chief Executive of New West End Company: “It is encouraging to see that we are still on track to hit £10 billion turnover despite the setbacks businesses across the West End have had to deal with this year. The Elizabeth Line is a welcome boost, and we hope the opening of Bond Street station will act as further encouragement for Londoners to come and spend time in the district.”
Paddy Gamble, Co-Head of Retail Strategy & Analytics at Colliers added: ""Our research really quantifies exactly what is happening on the ground in terms of sales. Shopping patterns and consumer behaviours have changed since the pandemic so instead of customers visiting perhaps five days, where people might just be browsing, consumers are now coming into the West End maybe three days to work, and with an increased intent to purchase, which is really what is driving the numbers through the tills. With the full introduction of the Elizabeth Line, this is set to drive and boost spend even further. So we have really taken a deep dive here with our analysis, combining footfall, transactions and other key metrics together to get a true picture of what is happening.”
Toby Courtauld, Chief Executive, GPE commented: “Despite the challenging macro-economic backdrop, it is encouraging that West End retail sales are improving, and turnover is expected to return to more historical levels. Our recent leasing experience supports this positive trend, demonstrating continued demand for our brand of high quality, well-located space. This is particularly evident in the West End, where our customers are using quality office space to help attract and retain talent and the area’s unique and diverse mix of commercial, retail and cultural attractions forms a key part of that offer.”
To ensure the West End stays on the right track towards growth, NWEC is calling for more support from the Government to promote sustained retail, leisure and hospitality growth. The reintroduction of tax-free shopping to UK highstreets has been hailed by the industry as a positive measure to entice international visitors back to our shores. It is hoped that the change will bring an extra £2 billion in spend to district business annually, but West End experts are now calling on the Treasury to go further in order to capitalise on the opportunity.
Alongside an urgent need to fundamentally reform business rates, NWEC is calling for a relaxation of Sunday trading laws in London’s two International Centres – the West End and Knightsbridge. Sunday is the busiest shopping day across the West End, yet for too long businesses have been forced to miss out on crucial trading hours with shops being forced to close at 6pm. If limitations were removed, it is estimated that the two International Centres would generate around £350 million of additional sales every year, supporting 2,000 full-time equivalent (FTE) jobs.
Corsi adds: “The reintroduction of tax-free shopping is a huge win for the West End, levelling the playing field between us and other retail destinations such as Paris and Milan. We now need to capitalise on the momentum with the relaxation of Sunday trading hours to ensure we make London the most attractive destination for domestic and international visitors alike, stimulating further growth and putting us back on the map. We have an eager international audience with cash to spend waiting in the wings – we now simply have to ensure that we’re open for business at the right times.”
The Mayor of London, Sadiq Khan, said: "These figures show the resilience of one of London’s top tourist destinations as it continues to recover from the pandemic. I’m proud that the Elizabeth line is helping to turbo-charge the West End's recovery and build a more prosperous London for everyone. It will receive a further boost this month with the opening of a new station at Bond Street giving Londoners and tourists quick and direct access to the heart of the West End.
“However, businesses are facing a fresh set of challenges with rising energy prices, increased business costs and disposable incomes being squeezed by the cost of living crisis. If the Government is serious about economic growth, it must support businesses in the West End through this crisis with tangible support, urgent business rates reform, and bringing forward the reintroduction of tax-free shopping for international visitors so we can start benefiting as soon as possible.”
NWEC is also working with the Government to ensure a speedy introduction of the new Electronic Travel Authorisation system for visitors from GCC states, making it easier for them to visit the UK , which is due to be introduced in 2023.
It is hoped that the Government will extend these services to other countries with high spending travellers, particularly from the Far East. These simple changes combined will go a long way to adding much needed revenue to balance sheets across the West End and further afield, allowing the UK high street to recover and thrive.
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Notes to Editors
About New West End Company
New West End Company is a partnership of 600 retail, restaurant, hotel and property owners across the world's top shopping and leisure destination anchored by Bond Street, Oxford Street and Regent Street.
It works in partnership delivering transformational projects, sustainable place management, destination marketing, advocacy, inward investment and commercial insights. It is an influential business voice, active in the wider community and a key partner in delivering a new West End.
Colliers (NASDAQ, TSX: CIGI) is a leading diversified professional services and investment management company. With operations in 63 countries, our 17,000 enterprising professionals work collaboratively to provide expert real estate and investment advice to clients. For more than 27 years, our experienced leadership with significant inside ownership has delivered compound annual investment returns of 20% for shareholders. With annual revenues of $4.5 billion and $81 billion of assets under management, Colliers maximizes the potential of property and real assets to accelerate the success of our clients, our investors and our people. Learn more at corporate.colliers.com, Twitter @Colliers or LinkedIn.